This paper explains the reasons behind the growing social tension and increased number of conflicts in China after a good performance in meeting the Millennium Development Goals. In this paper, we map out the issues with old urbanization (1978-2014) and the problems unsolved by past policy, and analyse whether the new policy changes introduced by the New Urbanization Plan (2014-2020) may help to deal with those problems. We argue that the tensions that evolve into conflicts are often a result of unaddressed social anxiety. Using money to purchase social stability can only be part of the solution. There need to be more serious attempts to improve governance, which involve: improving multi-level governance and inter-regional coordination, enhancing policy transparency and rule by law, adjusting the level of redistribution, and integrating rural and urban community governance structures.